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Sturgeon makes pledge on economy

CBI and SNP on collision course over business taxes

John CridlandBusiness organisation the CBI and Scotland’s nationalist government are on another collision course after issuing conflicting pleas to the Chancellor ahead of his Autumn Statement.

In a letter to George Osborne the CBI calls for a single UK market to be maintained, including a common business tax regime.

Its demand for unified taxes risks reopening the rift with the SNP-led Scottish government that erupted in the spring when the CBI registered with the Electoral Commission as a supporter of the No campaign.

The Scottish government was unhappy with the recommendations in the Smith Commission report published last week and wants more taxes devolved to Holyrood.

CBI director-general John Cridland (pictured), who was forced into an embarrassing climbdown over the electoral registration, today urges the Chancellor to use Wednesday’s statement in the Commons to commit the government to devolving some powers to the UK regions, but to leave business taxation intact.

The CBI wants the Chancellor to ensure further devolution “promotes local growth while maintaining the integrity of the internal market, including a common regime for business taxes, employment law and the labour market, financial services and energy.”

Its demand follows calls from First Minister Nicola Sturgeon yesterday for the Scottish Parliament to be given greater control over taxation and ahead of a speech on the economy in Glasgow today. It will be her first to business leaders since taking up the role and her first outside parliament.

She told Sky News yesterday: “The Smith Commission recommends income tax be devolved, though interestingly it says the personal allowance of income tax, which is one of the key levers you could use to lift people out of poverty, should remain reserved to Westminster.”

Today she told 70 business leaders and senior figures that she was committed to supporting business in partnership with the Scottish government. At a presentation at the offices of SSE in Glasgow, she announced that health expert Sir Harry Burns would be joining the government’s economic think tank.

“I am making clear that a strong, growing economy with a thriving business base is essential to the overall success of our country,” she said.

“I am also announcing that I will strengthen the role of the Scottish Government’s Council of Economic Advisers, to ensure that my government has access to the best possible advice as we developed new policies to grow our economy.

“I want the Council to focus more keenly on two key – and related – challenges.

“Firstly, on how we enhance our competitiveness: looking at how we use existing powers to make our economy more competitive – a key part of this debate will always be about how we compete with London, and we need to consider both its economic value and the benefits of its proximity as well as the significant challenges it poses.

“London has a centrifugal pull on talent, investment and business from the rest of Europe and the world. That brings benefits to the broader UK economy. But as we know, that same centrifugal pull is felt by the rest of us across the UK, often to our detriment. The challenge for us all is how to balance this in our best interests.

“The second big challenge is how we better align the objective of economic growth with the need to tackle inequality. To support this focus, I have asked Sir Harry Burns to join the Council and I am delighted that he has agreed.

“Sir Harry is now Professor of Global Public Health at Strathclyde University. I know that, working with Professor Stiglitz and other members, he will bring a valuable perspective to the work of the Council. The Council’s focus on competitiveness and equality reflects the fact that these are crucial areas if Scotland is to build on the relative success of recent years and face up to the challenges that lie ahead.”

Today I want to make three basic points to our businesses: the first is that your success underpins the prosperity and wellbeing of every community in Scotland. It’s vital for me and my government to work closely with you to help you succeed – and I intend that we do so.

“My second point is that our drive as a government to tackle inequality in our society is also a key part of our support for business. We believe – in common with many economists across the world – that equality and cohesion are good for growth, as well as good for individuals.

“My third point reinforces my first. Creating greater prosperity and fairness isn’t something any government can do alone – it has to be a shared national endeavour and I am asking you to be part of it.

“I want to hear your ideas about how we can grow the economy faster and more sustainably and better support you to compete, innovate and export. I want today to open up an ongoing dialogue with you about our shared ambitions and how we achieve them.”

Deputy First Minister and Finance Secretary John Swinney has also called for more powers to be transferred to Holyrood, including the minimum wage.

The Smith Commission published its report last week and recommended some income tax and air passenger duty is transferred to the Scottish parliament along with borrowing powers and some welfare benefits.

But Mr Swinney said it was not enough.

“The chancellor must use this Autumn Statement to make an early commitment to deliver on the financial powers of the Smith Commission and to do so as soon as possible,” he said at the weekend.

He added: “The Smith Commission did not recommend the job-creating powers I wanted to see come to Scotland but there is action the UK government can take to support internationalisation in the Scottish economy and to boost innovation.

“If these powers are not to be transferred to Scotland then the UK government must show that it will use the powers it has kept in Scotland’s interests.”

 

 

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